By now most news readers will know that some 75 homes burnt to the ground in a raging fire in St Francis Bay over the weekend. As sad as this story is (this writer has spent at least 15 pleasant Christmas holidays in St Francis Bay), this is a crisis that has been waiting to happen, that residents of St Francis Bay were aware of.
On August 16, 2010 the St. Francis Bay resident’s association (SFBRA) sent a Notice of Dispute to the Kouga Municipality (KM).
The seeds of this crisis were sown because local government was responsible for fire fighting in SFB. Because local government has monopolised the provision of fire fighting services, it has tended to reduce the quality of the product that it provides, while still charging the same amount. This can be compared with Eskom, the government monopoly that advertises for its clients to use less of its product, while hiking prices.
Instead of employing a private fire fighting company to clear public spaces of bush, and to be ready to respond to fire emergencies, the SFBRA attempted to force government to provide services by withholding taxes. This strategy failed. The government fire fighters could not be dispatched from Humansdorp in time, and this gave the fire just enough time to get out of control.
The lesson of this fire is that private citizens must do more than merely withhold taxes to try and pressure government into providing services. In fact, communities should not want government to provide any services at all. Communities should take it a step further and withhold taxes while taking back the responsibility of managing these services as well. This means communities should employ private fire fighting units to take the necessary preventative steps, such as clearing public spaces, and also responding to emergencies.
There is a place for the insurance industry in this process as well. It would have cost the insurance industry a fraction of what it will cost them now to rebuild these homes if they had maintained a private fire fighting unit in St Francis Bay since its disbandment several years ago.
Do the math: A capital outlay of two fire engines costing about R150,000 each, plus a fire station costing R1,000,000 or less. Total capital outlay R1.3 million. Ongoing costs of four stand-by fire fighters at salaries of about R250,000 each per year, R1 million per year.
Estimating a cost of damages of 75 homes with an average rebuild cost of R3 million plus household contents of R1 million, and the cost to rebuild this section of St Francis Bay to insurers will be about R300 million (very rough estimate).
With a capital outlay of less than R2 million and an ongoing annual cost of R1 million, SFBRA and their insurers could have had a private fire fighting and prevention unit operating for nearly 300 years.
Of course, the costs could have been split between the residents and also insurance firms and paid for on an ongoing basis. The fire fighting unit could also be tasked with doing more: think crime prevention, sea rescue, to mention two other responsibilities it could take on. Furthermore, there would not only need to be one such private fire fighting units, but two or even three could compete to provide these services, which incentivises better quality service at the lowest possible cost.
I want to end with the following: the South African government cannot be blamed for their failures. As the greatest economist who ever lived taught in his book “Socialism”, government has no way to tell whether it is doing a good job or not, as there is no profit and loss signals to communicate success or failure to them. Therefore governments are doomed to fail at delivering services. “Market failures” are therefore inevitable wherever government is involved. It is time the people of South Africa learnt this lesson, and started taking back the full responsibility for running their communities.
By Chris Becker. Source: News 24
If you able to assist these unfortunate souls with accommodation, blankets, water, pet care or food please call 042 200 1800.